Area Development News Desk (10/16/2007)
Ernst & Young predicts that global competition among governments
for private capital to fund roads, bridges, water projects, and other
public properties will increase over the next decade. The professional
services firm's latest report, "Global Infrastructure 2007: An Emerging
Asset Class," notes that large-scale infrastructure projects around the
global will require huge capital demands (running into trillions of
U.S. dollars) and private sources could account for 10 to 15 percent
($240 billion to $360 billion) of this amount annually. "The growing need for private capital for infrastructure is
caused by the budget shortfalls municipal and national governments
around the world have faced in recent years," says Dale Anne Reiss,
Ernst & Young's director of Global Real Estate. "Private capital
supporting public infrastructure is not new. But what is new is the
extent and the sophistication of private investment. It is truly
emerging as a new asset class." Reiss further notes that private
investors can bring tremendous experience in managing large-scale
projects at potentially lower costs than public agencies.
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